Twitter is showing signs of growth, but several key risks loom, Jefferies analyst Brent Thill said in a note sent out to clients Thursday.

The company announced mixed fourth-quarter results and a 12% year-over-year jump in daily active users, which sent shares up as much as 17% Thursday to more than $31 apiece. Twitter's revenue came in at $731.6 million, beating estimates, but its earnings of $0.12 a share missed the $0.14 that was expected.

Still, Thill thinks Twitter is "on the road to recovery." The fourth-quarter marked the fifth straight quarter of double digit DAU growth, which "points to better engagement from its core user base," Thill wrote. "Advertisers are starting to see greater ROI {return on investment} for their ad spend on Twitter on top of greater engagement with the ad metrics."

But don't bet the farm on Twitter, though, Thill says. The company slashed costs, helping it achieve a fourth-quarter profit margin of 40%. But Thill thinks those initiatives are "largely complete and any margin improvement will be much tougher to come by in '18." He added that "any expansion will need to be driven by continued execution on the top line and advertisers increasing budgets to the platform."

And the company's 4% monthly active user growth rate for the year is putting that expansion in jeopardy. The stagnating MAU "hints at difficulty attracting new users and dormant users back to the platform," Thill wrote.

The stock's near 30% gain year-to-date is another concern for Thill, who said that he finds it "tough to continue to find above market return without exceptional execution."